Question

Minimum wage law was introduced in the 1930s to protect workers after the Great Depression. Whether to increase the minimum wage continues to be an animated topic of discussion. What impact does increasing the minimum wage have on small business owners? Does increasing the minimum wage benefit the worker, or does it ultimately result in higher unemployment?

Answer 1

Increasing the minimum wage increases productivity for the worker. Employee morale and work ethics increase when employees believe a fair wage is paid. Economists have also linked higher wages to improved physical and mental health and reduced "decision fatigue," contributing to increased productivity

Increasing the minimum wage would lower turnover. Higher wages lead to lower turnover for staff, resulting in lower recruiting and training costs. Increasing the minimum wage would reduce absenteeism. When workers earn higher wages they are less away from work, leading to higher productivity

The increase in the minimum wage will also improve local economic development, as people benefiting from the increase are already living paycheck to paycheck and instantly spend the extra money.

To increase the minimum wage is not to kill jobs. Leading economists have found that minimum wage increases have little discernible effect on wages, including workers in high impact industries such as restaurants and retail. • Increasing minimum wages raises consumer spending and stimulates the economy. Aand results in a substantial rise in GDP and jobs. A raise in minimum wage benefits mainly low-paid workers, specifically those most likely to immediately return additional income to the economy, kick-starting a virtuous cycle of higher demand for goods and services, increases in employment and improved productivity.